Is it the beginning of the end for York County foreclosures?RAYAC president discusses how the county got to where it is, what the future might hold
Home sales are up through last month in York County, while the median price remains down, all during a year when the county has registered some of the highest, if not the top, foreclosure statistics in the state.
In July, for example, its rate of 1 in every 416 housing units receiving a foreclosure filing put it on par with Nevada, an epicenter of the national crisis, according to California-based RealtyTrac.
However, the most recent numbers available for September show the county's rate has dropped back considerably to 1 in every 1,364 homes.
The president of the Realtors Association of York & Adams Counties Inc., John LeCates, recently spoke with the Business Journal about how this area of the midstate came to be in the position it is in today.
LeCates, an agent with York County-based Morgan-Collins Inc., also talked about what the future might hold and how foreclosures have affected the overall housing market.
Q: The most recent RealtyTrac foreclosure numbers have shown improvement, but they had until now been showing York County as having a pretty high foreclosure concentration. Why do you think the county's numbers have been popping up on the national gauges?
A: In the boom, (we) had an extreme increase of people from other areas moving to York County because, relatively, our prices were low, and so we got a lot of influx from Maryland, the Harrisburg area and even from Lancaster and other areas. So we had this big increase during the boom, and naturally that turned into a big decrease and added to the number of foreclosures.
So we are a smaller boom area compared with other regions that were more boom states?
Exactly. And that's what made our (foreclosure) numbers so high. But obviously, that's starting to clean up a little bit. And the foreclosures actually helped us as far as volume of sales, but they kept our prices down.
Nationwide, I think (prices) are up anywhere from 8 to 10 percent on average, but in York and Adams counties, we've been in a decrease, but it's been pretty level, maybe 1, 2, 3 percent (down).
If you look at January through the end of September, the number of home sales is up and the average sales price is pretty level — median sales price.
Any reason why September numbers were down in sales volume?
September is historically low. And I think probably our September and October are greatly affected by the election. I've heard that a lot of companies aren't investing, hiring people, and people are generally sitting back and waiting.
And the funny part of it, it usually doesn't matter who wins. After the election, people generally feel good and then housing sales start to pick up a little bit.
So you think that the recent foreclosure numbers might be the beginning of the end of what the recent cycle has been, with a lot of foreclosures here in York County?
Foreclosures aren't going to end, though I do hope for the general public that they do slow down, and with that slowing down I believe you will see a gradual increase in prices. But one thing we're really worried about is (talk of) elimination of the mortgage interest deduction.
(The National Association of Realtors) calculates that will probably give like a 15 percent decrease in the prices of homes if they get rid of the interest deduction. And if that happens, you're going to have more people upside down, and you're going to have more foreclosures and sales will slow down because (people) won't want to sell their houses. They won't have the value to cover their mortgages.
One reason given for Pennsylvania's current foreclosure environment is that the process here has lagged behind other states. Is that something you have seen manifest itself here, so we're just delayed, not really worse off than other parts of the country?
Yes and no. The federal government, if you remember a little bit ago, found out there were a lot of errors in some of the foreclosures, and people were signing things they shouldn't have been and that kind of thing.
So for the past several years, foreclosures in Pennsylvania can take a year or two. It is a long process — and (the delay) also makes homes worth less.
A lot of these homes are sitting there for two years vacant, and things go wrong. You need to maintain your home, obviously, and any homeowner knows that. And that's why I think the short-sale market, (which) is something a little different — it's preforeclosure — is increasing and banks are realizing that is probably the way to go.
Do you think that's why we might be seeing a decrease in foreclosure filings? Lenders are saying that they can't be spending this much time in the foreclosure process?
I don't have the numbers, but the general feeling is that you are seeing a lot more short sales than we were. But I also really do feel that we are getting through a lot of the foreclosure situation (and) the process seems to be going faster also.
How much longer do you think we have before we catch up to the other states that might have already gone through their worst periods?
I believe and I hope that we are getting out of this slowly, and I think you will start to see slight (price) increases in April or May. That's when it usually picks up anyhow. March 15 on is usually the best time of the year. It's not always, it's not set in stone, but it usually is … And I believe at that time we'll see slight increases in home prices.
Median sales price: $158,995
Homes sold: 64
Foreclosure filing rate: 1 in 669 units
Median sales price: $147,200
Homes sold: 342
Foreclosure filing rate: 1 in 416 units
Median sales price: $164,900
Homes sold: 69
Foreclosure filing rate: 1 in 1,074 units
Median sales price: $135,000
Homes sold: 266
Foreclosure filing rate: 1 in 1,364 units
Source: RealtyTrac and Realtors Association of York and Adams Counties Inc.